Use of 2.2 Percent Lease Riders in Building with 15-Year 421-a Tax Abatement

Landlord's building became subject to rent stabilization under 421-a tax abatement program. Landlord's building received a 15-year tax abatement. Landlord didn't include a lease rider permitting an additional 2.2 percent rent increase under 421-a program in initial leases signed after the tax benefit began, but during the 10-year period before it would start collecting the 2.2 percent increase. Landlord asked the DHCR if it could include the lease rider in subsequent vacancy and renewal leases signed during the five-year period when landlord could collect the 2.2 percent increases. In an opinion letter, the DHCR said yes. Nothing barred landlord from including 2.2 percent lease riders in renewal leases, or future vacancy leases.

DHCR Opin. Ltr. by Gregory C. Fewer (10/5/04) [3-pg. doc.]